Client Update - 18th July 2025

Rising unemployment, higher than expected inflation, Trump attacking the US Federal Reserve Chairman, in between his tariff announcements and then we have a review of red tape regulation in the UK. There seems to be so much going on at the moment.

Away from “he who shall not be named” in the US, back home Chancellor Rachel Reeves preceded her Mansion House speech with the “Leeds Reforms” – where she announced plans to reduce burdensome regulation to try and improve access to the UK financial services market.

It seems clear that Reeves hopes to encourage people to improve their investing culture in the UK via a package of reforms that she hopes will also boost economic growth by driving investment into UK equities, rather than leaving cash on deposit. This will be done not just from encouraging pension funds to invest in UK assets, but also via a new consumer campaign that will lay out the long-term benefits of investing for better returns, rather than keeping savings in cash. Banks will also nudge customers with large cash balances to consider investing instead.

Rachel Reeves revealed the plan on Tuesday, and it seems like an echo of the 1980s 'Tell Sid' campaign around the privatisation of British Gas that is held up as a successful drive to engage the public with the stock market.

Among the policies to support this move was a national advertising campaign, led by the likes of Barclays and Vanguard, that would encourage people to start investing their money.

“The industry-led ad campaign will help to explain the benefits of investing, and from April 2026 the FCA will roll out Targeted Support — allowing banks to alert customers about specific investment opportunities to consider shifting money from low-return current accounts to higher-performing stocks and shares investments,” Reeves said.

The Treasury also reported that the UK has the lowest level of retail investment in the G7, with 29 million adults having cash in a low-interest rate account of around 1%.

A feared cut to the £20,000 annual cash ISA limit was not announced, though the Government says it will continue to consider ways to strike the right balance between cash savings and investment. The 'Leeds Reforms', thus named as they were unveiled in the West Yorkshire city by the Chancellor, will also include reforming the bank ring-fencing regime and reducing burdensome regulation in the City.

This was then followed up on Tuesday night by her Mansion House speech, where she reiterated the point. Reeves set out how the government will cut red tape to attract investment and drive growth. “Businesses will be welcomed to the UK with open arms and unnecessary financial red tape that stalls inward investment and slows growth will be drastically cut under the plans,” she said.

Economic Secretary to the Treasury Emma Reynolds said: ‘Helping people take advantage of better returns from investing is key to better financial health, giving them a stake in a growing economy and connecting promising businesses with capital.’ This sounds like an interesting concept to me, although the change in risk profile from cash to equities needs more than a cunning plan – perhaps a further need for financial planning advice?

The plans to help boost retail investment come as the Treasury and FCA also revealed proposals to curtail the powers of the Financial Ombudsman Service (FOS), in a push to loosen the burden of regulation and help product development. The Treasury explained that it feels there is excessive caution in complying with regulatory requirements that is stifling growth and innovation.

There can be no doubt that Britain will be better off if financial services as an industry is allowed to grow and flourish and support (according to the Treasury) another 1.2 million jobs. The fine balance between growth and a lack of regulation (2007/08 financial crisis comes to mind) remains a key area where more detail is undoubtedly required. Nonetheless, growth plans are very welcome, and we await more detail on these matters, and indeed where financial advice will sit in ensuring new investors understand the risk return profile of equities versus cash. A promising start. Do have a good weekend.